Employees working outside of France

Transcription

1 Employees working outside of France If your base taxable income in 2016 exceeded 15,000 and you have internet access in your main residence, you must file your income tax return online. Paper returns will only be accepted in a limited number of circumstances (for example, if you encounter connection problems). MAKE YOUR LIFE EASIER: FILE YOUR TAX RETURN ONLINE Join the 140,000 users living abroad who filed their income tax returns online in 2017 and the 95,000 taxpayers who paid their taxes electronically (i.e. via monthly instalments, direct debit on payment due date, online payment, etc.). Useful information The impots.gouv.fr website makes your dealings with the tax administration easier by cutting out the distance and removing the constraints involved in sending paper returns. You can connect to your personal user account by entering your tax number and the password that you have chosen. Once connected, you can view your tax documents, declare your income, pay your taxes online from a bank account in the SEPA (i.e. the 28 EU Member States, Iceland, Liechtenstein, Norway, Switzerland and Monaco), manage your payments, or carry out certain formalities online (correcting a mistake or an oversight, filing a claim, requesting an extension to a payment due date, reporting a change of address or personal situation, etc.). You can obtain more detailed information about all of the online services offered by the Public Finances Directorate General (DGFiP) by consulting the information leaflet. To do so, in the footer of the impots.gouv.fr website, click Documentation under the Rubriques du site heading. On the Documentation page, click Accès aux dépliants et autres publications. NB: Beginning in 2019, income tax will be withheld at source. For more information, see The following information applies to employees working abroad. You are considered to be working abroad if you work outside of: - Mainland France, the coastal islands and Corsica. - The French overseas départements (Guadeloupe, Martinique, French Guiana, Réunion, and Mayotte). 1 Is your residence for tax purposes still located in France? Subject to the international tax treaties, you are considered to reside in France for tax purposes if you fulfil one or more of these criteria: 1 Mayotte became a French overseas département in

2 Your household (spouse or civil partner and children) remains in France, even if, for professional reasons, you have to live in another country temporarily or most of the year. If you do not have a household, your residence for tax purposes is defined as your main abode. You work as a salaried employee or non-wage earner in France, except if this job is incidental. The centre of your economic interest lies in France. This is the place of your main investments, the head office for your business dealings, the centre of your professional activities, or the place where you make most of your income. If your residence for tax purposes is outside France, you are only taxable in France if you have income arising in France or if you have one or more residential properties there. If your residence for tax purposes remains in France, you are liable to tax in France on all your income, including the remuneration for your work abroad. You are therefore required to file your income tax return with the tax assessment service that covers your usual residence. In addition, you are required to provide us with the details of bank accounts (in use or closed) opened abroad (form 3916, available online or on paper, to be enclosed with your 2042 income tax return). IF YOUR RESIDENCE FOR TAX PURPOSES IS NO LONGER IN FRANCE, YOU MUST PROCEED AS FOLLOWS: What to do the year you transfer your residence for tax purposes abroad You must inform your Public Finances Centre as soon as possible of your new address abroad. You must not wait until you file your tax return to do so. You can inform us of this change via your personal user account on impots.gouv.fr so that we can send your tax return to your address abroad. The year following your departure abroad, file your income tax return online on impots.gouv.fr if you have Internet access in your main residence and your base taxable income in year N-1 exceeds the relevant threshold ( 15,000 for 2017 income, i.e base taxable income). If you do not fulfil these requirements, you may file a paper return with the tax assessment service covering your former usual residence in France. In this return, you will declare your income from 1 January to the date of your departure abroad. If you continue to receive income arising in France and liable for income tax in France following your departure abroad, declare this income online or, if applicable, on paper form 2042 NR (which you can download from the impots.gouv.fr website) and enclose it with your usual tax return. If you receive no income arising in France following your departure, state that this is the case in the Renseignements box when you file your return online or on a separate sheet stapled to your paper income tax return. The deadline for filing returns is the same as that for residents. 2

3 The following years: File your income tax return online on impots.gouv.fr, or if applicable, send your 2042 income tax paper return form to the Service des impôts des particuliers non-résidents only if you continue to receive income arising in France and liable for income tax in France. 2 If you have income that is taxed at source from non-residents (wages, pensions etc.), you must also file form 2041-E either online or on paper and attached to your main income tax return. This form is sent to you before your income tax return. The year you return to France: Inform the Service des impôts des particuliers nonrésidents of your new address as soon as possible via your personal user account if you were covered by this service for tax purposes in the previous years. If you are unable to do so, file your return with the Service des impôts des particuliers nearest to your home, indicating your current address. File your return online on the impots.gouv.fr website or, if applicable, send your paper tax returns (form 2042-NR up to your return and form 2042 to declare income earned after you return to France) to the Service des impôts des particuliers non-résidents, clearly stating your new address in France to make sure that your details are transferred to the tax assessment service covering your new residence. If you were no longer required to file tax returns in France when you were abroad, you must file a 2042 income tax return (downloadable from impots.gouv.fr) by the ordinary filing date for French taxpayers. You must send this paper return to the Individual Tax Department covering your residence in France, stating your last known address in France. In this case, you may not file your return online and must wait until the following year for this option to be available. Local taxes: During your period abroad, you remain liable for local taxes (residence tax, real property tax and, where applicable, vacant premises tax) on the real property you have or own (these taxes are managed by the tax assessment services covering the district where the property is located). NB: Income from property received by non-residents and capital gains on property disposals by non-residents are subject to social contributions. PAYING YOUR TAXES If you have a bank account in France or in Monaco, you can pay by: Direct debit on the payment due date. This will remove the burden of having to think about making the payment and will improve your cash flow (sums are debited from your bank account domiciled in France or Monaco ten days after the payment due date). You can set this up by: Internet on impots.gouv.fr up until the last day of the month preceding the payment due date. Ensure that you have your income tax notice and bank details to hand. The procedure is fully electronic and will enable you to sign a mandate authorising the direct debit. No other procedures are necessary. Letter, or phone call to your Direct Debit Service Centre before the end of the month preceding the payment due date. 2 Subject to international tax treaties to prevent double taxation. 3

4 You will receive a Direct Debit mandate that you must sign and send back to the department indicated on the form. Monthly instalments (on your bank account domiciled in France or Monaco): you can sign up for this service at any time during the year. To pay your taxes for the current year. If you sign up for this service before 30 June, the instalments will begin the following month. To pay your taxes for the following year: - If you sign up for this service between 1 July and 15 December, your bank account will be debited starting on 15 January of the following year. - If you sign up for this service between 16 and 31 December, your bank account will be debited starting on 15 February of the following year. NB: in this case, the first instalment will include the January and February payments. You can set this up by: o Internet: via your Personal user account on the impots.gouv.fr website. You will receive an confirming that your request is being processed. The procedure is fully electronic and there is nothing else you have to do. o Sending a letter to your Direct Debit Service Centre (Centre prélèvement service CS LILLE CEDEX 9). Alternatively, send an to cps.lille@dgfip.finances.gouv.fr or a fax to +33 (0) You will receive an acknowledgement of receipt along with a mandate that you should sign and date and send back to the department indicated. Direct payment online on the website impots.gouv.fr. In this case, you have an additional 5 days to pay your tax; the amount due is debited at least 10 days after the payment due date. You will be informed of the date when your payment order is registered. You can change the amount to pay and your bank details. Direct payment online via your smartphone or tablet: download the free application Impots.gouv on App Store, Google Play ou Windows Store, snap your code (at the bottom in the left-hand corner of the Home page) and confirm your payment. From your computer you can get the same advantages than by direct payment online. Interbank payment order (TIP SEPA). If you pay by TIP SEPA, do not enclose a cheque with your payment. You must sign and date the TIP SEPA leaving the amount unchanged, and return it in the envelope provided along with your bank account details (bank account domiciled in France or Monaco) written on the TIP SEPA if requested or if they have changed since the last payment was made. Payments made by TIP SEPA are cashed immediately upon receipt. Cheque: You can pay amounts up to 10,000 by cheque if, for example, the sum paid differs from that mentioned on the TIP SEPA. Make your cheque payable to Trésor Public and enclose an interbank payment order (TIP SEPA) for reference purposes only without signing it. Do not staple or glue them together. Use the prepaid envelope provided to send off your cheque and interbank payment order. Do not enclose any other documents. Write your surname, first name and notice of assessment or payment reference number on the back of the cheque. 4

5 Cheques are cashed immediately upon receipt. NB: To pay tax equal to or greater than 1,000, you must pay directly online via impots.gouv.fr from your computer, smartphone or tablet, or sign up for direct debit on the payment due date or in monthly instalments. Failure to do so will result in a surcharge of 0.2% being applied to the total amounts paid using an alternative method (Article of the French General Tax Code). The threshold for payments by direct debit on the payment due date, in monthly instalments, online or via smartphone or tablet, will be lowered to 300 in If you do not have a bank account in France, you can: Pay online or by smartphone or tablet via a bank account domiciled in the SEPA zone comprising 33 countries (the 28 Member States of the European Union and Iceland Liechtenstein, Norway, Switzerland and Monaco). You have an extra 5 days to pay and your account will be debited at least 10 days after the due date. You will be informed of the date when your payment order is registered. Pay by transfer any amounts less than or equal to 1,000 to the Service des impôts des particuliers non résidents. Make sure that you provide your surname, first name and notice of assessment or payment reference number when doing so. We recommend using electronic payment methods for security reasons and given the fact that you are abroad. 5

6 Below are the bank details of the Service des impôts des particuliers non-résidents: IBAN No. FR Agence Banque de France, 31 rue Croix des Petits Champs, PARIS Cedex 01 SWIFT No.: BDFEFRPP CCT NB: make sure you include your payment references (last name, first name, reference of your tax assessment notice, and the Banque de France details) If you require more detailed information on how to pay by monthly instalments or direct debit on the payment due date (i.e. how to select or change payment methods or to notify of a change of address or bank account), you should contact: Centre Prélèvement Service LILLE CEDEX Fax: +33(0) or cps.lille@finances.gouv.fr Special cases: You receive a reminder (reminder letter or final notice) even though you have paid the tax before the payment due date: the fact that you are abroad could mean that the tax payment arrived after the deadline. Make sure that you take account of postal delivery times. Check that the amount due has definitely been debited from your bank account. If the amount has already been debited, send a copy of your bank statement to the Service des impôts des particuliers non-résidents. You can also connect to your specific user account on impots.gouv.fr to keep track of your payment history. 6

7 There are five possible cases, depending on your situation You have income arising in France 4 Your residence for tax purposes is outside of France 3 Case No. 1 You are liable to French income tax only on the income arising in France. Some of your income is taxed at source or subject to a levy. Given that the income taxable in France only accounts for part of your income, you cannot deduct any expenses from the total income. Taxation is calculated on a sliding scale, with a minimum rate of 20%. This rate may be reduced if you meet certain conditions. Your residence for tax purposes is still in France All your income is taxable in France, including the remuneration for your work abroad. You are sent by your employer to a country other than France and other than the country in which this employer is established 5 This remuneration is totally exempt from income tax in France if: 6 Case No. 2A the remuneration from your work abroad is liable in the country where the job is worked to tax equal to at least two-thirds of the tax that would be paid on it in France. Case No. 2B your work abroad involves certain activities defined by law as exceptions and you meet the relevant conditions (nature and length of work). Case No. 2C If you do not meet the conditions for total exemption, you will be taxed on the remuneration earned for the work abroad up to the level of taxation that would have been applied in France for the same work. 6 3 All countries and territories with the exception of mainland France and the French overseas départements. 4 Subject to provisions to the contrary in tax treaties between France and certain countries. See the international treaties on the impots.gouv.fr website. 5 The employer must be established in France, the European Union, Norway, Liechtenstein or Iceland. 6 Remuneration supplements paid for living abroad may be exempt in certain circumstances, but they are counted in the calculation of the tax rate. 7

8 CASE No. 1: YOUR RESIDENCE FOR TAX PURPOSES IS OUTSIDE OF FRANCE, BUT YOU HAVE INCOME ARISING IN FRANCE Subject to provisions to the contrary in the tax treaties 7 between France and certain countries, only your income arising in France will be taxed in France. Rules governing the taxation of income arising in France: The following taxable income is subject to the sliding scale, with a minimum rate of 20%: Income from real property located in France and rights on this property; Income from operations located in France; Earned income, both wage and non-wage, from professional activities in France; Income corresponding to artistic and sports services provided or used in France; Income from employee share-ownership taxed as wages and salaries either automatically or by choosing this option (Article 182 A ter of the French General Tax Code); The following income, when the payer resides for tax purposes in France or is established in France: - Pensions and annuities (see the particularities described below); - Income received by inventors and by authors and composers in the form of royalties; - Income from industrial and commercial property rights; - Sums paid by way of remuneration for services provided or used in France. Particularities concerning wages, salaries, pensions and annuities: Wages, pensions and annuities arising in France and paid to non-residents are taxed at source, subject to provisions to the contrary in the tax treaties. The employer or payer deducts the tax at source from the net taxable amount, i.e. after the 10% deduction for professional expenses. The deduction at source is calculated by income brackets at rates of 0%, 12% and 20% (and 8% and 14.4% for wages paid to nonresidents for work conducted in French overseas départements). Income received by artistic and sports persons is subject to a single rate of 15%. Amounts that have been taxed at source at 0% or 12% (or 8% if the wages are paid for work in a French overseas département) are not subject to any further taxation provided they are paid by a single payer (employer or retirement fund). Only the sums in excess of the 12% bracket are taxed in keeping with the sliding scale, with a minimum rate of 20%. You will need to fill in special form 2041-E Personnes fiscalement domiciliées hors de France to determine the amount to be declared on the income tax return. 8 Since 1 April 2011, taxation at source has also been in place on income from the exercise of stock options, the acquisition of bonus shares, the sale of founder s share warrants (BSPCE) and similar income received by persons residing outside of France for tax purposes pursuant to Article 182 A ter of the French General Tax Code. Where taxpayers opt for taxation in the wages and salaries ( traitements et salaires ) category, the taxation at source is calculated by applying the rate provided for in Article 182 A of the French General Tax Code. This deduction at source does not discharge income tax liability. The income must be declared on your income tax return the following year. 7 See the tax treaties on impots.gouv.fr. 8 Form 2041-E is available on impots.gouv.fr. 8

9 Are you eligible for a lower rate of taxation? To benefit from the application of this measure, declare the total amount of your income arising in France and abroad 9 (Box 8TM on tax return 2042-C or form 2041-TM or a separate sheet of paper) and have available for the administration any substantiating documents evidencing the amount of your income arising abroad. You must specify on your online tax return the nature and the amount of each revenue in section Renseignements complémentaires at the end of your tax return. If the average rate of taxation on your income arising in France and abroad calculated by applying the sliding taxation scale is below 20%, the administration will apply this rate of taxation. The following income is subject to a levy: Investment income (dividends, interest, etc.) is taxable in France, but the financial establishment applies a flat-rate levy discharging income tax liability. Do not declare this income on your income tax return. Capital gains are liable to taxation at the time of sale, subject to the international tax treaties, when they are: Capital gains from sales of goodwill or real property located in France or stocks and shares in companies not listed on the stock exchange, when their assets are made up mainly of such property; Capital gains from the sale of holdings or securities in companies with their registered office in France, when the seller or shareholder or partner from whom the shares are purchased, along with his or her spouse, their ascendants and descendants, hold or have held at some point in the last five years over 25% of the shares or profits (form 2074); Do not declare this income on your income tax return. WHERE AND WHEN TO FILE YOUR RETURN File your return online at impots.gouv.fr on or before 22 May 2018 or send your income tax return on or before 17 May 2018 by post to: Service des Impôts des Particuliers Non-Résidents 10 rue du Centre TSA Noisy-le-Grand Cedex France Switchboard: +33 (0) or via your secured messaging service easy to reach from your specific user account on impots.gouv.fr. See pages 3, 4, and 5 for income tax return filing procedures and payment methods. 9 Nature and sum of each item of income. 9

10 CASE NO. 2: YOU ARE SENT BY YOUR EMPLOYER TO A COUNTRY OTHER THAN FRANCE AND OTHER THAN THE COUNTRY IN WHICH THIS EMPLOYER IS ESTABLISHED 10 WHEN AND WHERE TO FILE YOUR INCOME TAX RETURN You need to file your income tax return by the usual deadlines either online or with the tax assessment service covering your residence for tax purposes in France. CASE 2A: YOUR RESIDENCE FOR TAX PURPOSES IS STILL IN FRANCE, BUT THE REMUNERATION FOR YOUR WORK ABROAD IS LIABLE IN THE COUNTRY WHERE YOU WORK TO TAX EQUAL TO AT LEAST TWO-THIRDS OF THE TAX YOU WOULD PAY ON IT IN FRANCE This remuneration is totally exempt from income tax in France, but is counted in the calculation of your taxation rate. Your household s other income is taxable in France under the standard procedure. CASE 2B: YOUR RESIDENCE FOR TAX PURPOSES IS STILL IN FRANCE, BUT YOU CARRY ON CERTAIN WAGE-EARNING ACTIVITIES ABROAD - You carried on your wage-earning work: either for more than 183 days over a period of 12 consecutive months in the following fields: Construction and assembling sites, installation of industrial assemblies, their start-up, their operation and associated engineering; Exploration and mining of natural resources; Navigation on board vessels registered with the French international register; or for more than 120 days over a period of 12 consecutive months in market research. Your remuneration is eligible for exemption if you meet the three following conditions: - You were posted abroad by your employer; - You resided in France for tax purposes before your departure; - Your employer is established in France, in another European Union Member State or in Iceland, Liechtenstein or Norway. NB: These provisions do not apply to cross-border workers or public servants. 10 Established in the European Union or the European Economic Area. 10

11 CASE 2C: YOUR RESIDENCE FOR TAX PURPOSES IS STILL IN FRANCE, BUT THE REMUNERATION FOR YOUR WORK ABROAD IS LIABLE IN THE COUNTRY WHERE YOU WORK TO TAX EQUAL TO LESS THAN TWO-THIRDS OF THE TAX YOU WOULD PAY ON IT IN FRANCE OR YOU DO NOT MEET THE CONDITIONS FOR TOTAL EXEMPTION In this case, the remuneration earned for your work abroad is taxable up to the level of taxation that would have been applied in France for the same work. NB: any remuneration supplements you receive for living in the other country are exempt from income tax in France, but are counted in the calculation of your taxation rate, if they satisfy all the following conditions: 1 They are paid for periods worked abroad in the employer s direct and exclusive interest; 2 They are justified by a physical transfer requi ring residence of at least 24 hours in the other country; 3 They are determined before you leave France, ar e calculated based on the length, number and place of the periods of work abroad, and account for less than 40% of the remuneration you would have received had you stayed in France. Your household s other income is taxable in France under the standard procedure. 11

12 TO FIND OUT MORE 1 On your tax calculation and tax payment Service des impôts des particuliers non-résidents 10 rue du Centre TSA Noisy-le-Grand Cedex France Via your secured messaging service easy to reach from your specific user account on impots.gouv.fr. Joint switchboard: +33 (1) Monday to Friday 9am-4pm NB: if you ask a relative to carry out a formality on your behalf, please remember to supply him/her with a letter of proxy and a copy of your identification documents. Alternatively, contact the Individual Tax Department (SIP) in France under whose jurisdiction you fall. 2 On payment by monthly instalments and direct debit on the payment due date Centre de Prélèvement Service de Lille Lille CS Cedex 9 France Fax: +33 (0) or 56 cps.lille@dgfip.gouv.fr 3 General information Go to International/Particulier on impots.gouv.fr impots.gouv.fr/international/particulier Entitlement to French health insurance benefits is dependent on residence in France. A transfer of residence abroad generally terminates your entitlements and you are asked to return your Carte Vitale healthcare smart card, except in certain cases such as individuals whose main income is a French retirement pension or invalidity benefit and employees posted abroad by their company who continue to be covered by French social security legislation throughout the period of their posting abroad. You are therefore advised to contact your national health insurance body and supplementary health insurance body to find out precisely what your situation is and, where necessary, choose your health insurance coverage abroad before your departure. THIS LEAFLET IS A SIMPLIFIED DOCUMENT. FOR FULL INFORMATION, SEE THE RELEVANT LEGISLATION, REGULATIONS AND INSTRUCTIONS. GB 180 B January